Mitchells & Butlers has provided a trading update in light of the Covid-19 outbreak, with like-for-like sales 0.9% for the 24 weeks to 14 March.
M&B said recent trading had been severely impacted by the containment measures taken by the Government, including the recommendation to avoid pubs and restaurants, which is now expected to lead to a further significant downturn in sales.
A statement read: “Given the rapidly evolving nature of the situation it is impossible to quantify the impact Covid-19 could have on our financial performance. However, we expect a significant reduction in our expected outturn for 2020 and, given this uncertainty, can no longer provide detailed guidance on the expected forward financial performance for the year.”
The group said it is working to protect trading and cash flow through a number of actions including suspension of the capital programme and reduction of costs across the business.
M&B said it has a strong balance sheet with material cash resources sufficient to fund obligations through the half year on 11 April 2020, and well into the second half.
The next securitisation restricted payment and covenant test is at the half year.
The group said sufficient headroom had been established so the group could suffer a significant loss in the remaining four weeks to the test date and still clear covenant levels.
The statement concluded: “We are working hard to deliver a performance within these parameters and are encouraged by the measures announced last night by the Chancellor, notably business rates relief and access to a credit guarantee facility, which should further underpin our future performance and liquidity.”
M&B has headroom to suffer ‘significant loss’
Mitchells & Butlers has said it has a strong balance sheet and cash resources to fund obligations through the half year on and into the second half. In a trading update in light of the Covid-19 outbreak, M&B reported like-for-like sales of 0.9% for the 24 weeks to 14 March, saying trading had been ”severely impacted” by the containment measures. M&B said it was working to protect trading and cash flow through a number of actions, including suspension of the capital programme and reduction of costs across the business.